Wednesday Nov 13, 2024
Wednesday Nov 13, 2024
Wednesday, 5 April 2023 00:00 - - {{hitsCtrl.values.hits}}
Electricity regulator, the Public Utilities Commission of Sri Lanka (PUCSL) has urged the Ceylon Electricity Board (CEB) to propose a tariff reduction based on the recent global market and domestic economic improvements.
Holding a media briefing yesterday, PUCSL Chairman Janaka Ratnayake said the global price reduction in fuel and coal as well as the domestic developments such as the rupee’s appreciation against the dollar must be passed on to the electricity users.
He also pledged to withdraw the court case against the recent tariff hike if the CEB provides immediate tariff reliefs that will pass on the benefits of rupee appreciation and global fuel price reduction to the electricity users.
Total electricity users in Sri Lanka at present are 7.8 million, and of that 6.7 million of which are domestic users, 1.1 million are general purpose users and 1.4 million uses below 30 units per month. A total of 1.7 million use 90 units, while 4.8 million use below 90 units each month.
He proposes CEB to at least reduce 50% of the 66% tariff hike that was implemented in February this year.
“The tariff revision was to recover the cost, and now the diesel price has increased by Rs. 80, the rupee has appreciated, and the demand for electricity usage has also dropped by 18% in the first quarter of 2023 in comparison the same period last year. Therefore, that benefit should be given to the general public immediately,” Ratnayake pointed out.
He said the demand factor alone reduces the reliance on high-cost oil-fired thermal electricity generation of the CEB. Thus, the electricity tariffs should be slashed as per the cost-reflective pricing mechanism introduced by the Government, to ensure the reduced price be passed on to the electricity users.
Apart from the demand, Ratnayake also pointed out the foreign exchange rate, citing that the rupee has appreciated against the dollar from Rs. 370 per dollar to around Rs. 325 per dollar at present.
“The strengthening of the rupee alone brings down the fuel and coal import costs of the CEB. As per the calculations, cost reduction is about 20% per annum,” he said.
PUCSL Chief also pointed to the drop in international fuel prices, insisting that the fuel costs of the CEB would reduce significantly.
According to a statement shared by the PUCSL, it shows that at present, the Richards Bay Coal index is at $ 133 a ton, Singapore PLATTS for Furnace Oil is at $ 403 a ton, Singapore PLATTS for Diesel is at $ 98.38 per barrel and Singapore PLATTS for high-quality chemical Naptha is at $ 674 a ton.
PUCSL Chief Ratnayake also sent the letter on 30 March to the CEB, requesting to propose a reduced electricity tariff structure capturing all these recent developments by 15 May.
“Considering the abovementioned factors, any proposal from the CEB to reduce the electricity tariff will undoubtedly provide much-needed relief to all the electricity users, especially to the vulnerable domestic category and the SME sector of the economy,” he stressed.
